Trade-Ideas LLC identified

Crocs

(

CROX

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Crocs as such a stock due to the following factors:

  • CROX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.0 million.
  • CROX has traded 112,447 shares today.
  • CROX is trading at 2.89 times the normal volume for the stock at this time of day.
  • CROX is trading at a new low 4.00% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on CROX:

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and distributes casual lifestyle footwear and accessories for men, women, and children worldwide. It offers various footwear products, including clogs, sandals, wedges, flats, sneakers, and boots. Currently there are 2 analysts that rate Crocs a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Crocs has been 986,100 shares per day over the past 30 days. Crocs has a market cap of $872.8 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.34 and a short float of 14.6% with 11.89 days to cover. Shares are up 14.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Crocs as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 518.4% when compared to the same quarter one year prior, rising from -$2.43 million to $10.15 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.9%. Since the same quarter one year prior, revenues slightly increased by 6.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CROCS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CROCS INC reported poor results of -$1.35 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus -$1.35).
  • CROX has underperformed the S&P 500 Index, declining 19.25% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, CROCS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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